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HomeBusinessPower Finance Corporation approves Rs 15,000 cr loan to Shapoorji Pallonji group

Power Finance Corporation approves Rs 15,000 cr loan to Shapoorji Pallonji group

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Power Finance Corporation (PFC), the board of state-run has approved a Rs 15,000 crore loan to the Shapoorji Pallonji (SP) group companies. This signifies a significant financial boost for the Mistry family, who are the promoters of the group and hold an 18.37 percent stake in Tata Sons, according to a report by The Economic Times (ET). Along with fulfilling commitments made to creditors of their operating companies, this loan will also assist the Mistry family in repaying personal debt.

The loan will be secured against the cash flows of the SP group’s real estate business and the Mistry family’s shares in Tata Sons. The loan term is expected to be four years. An additional provision to cover interest costs for the first two years. A formal sanction letter is anticipated, potentially including specific conditions.

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The Power Finance Corporation loan will be disbursed to two Special Purpose Vehicles (SPVs) established by the Mistry family. These SPVs will use the loan proceeds to repay bondholders. The SPVs will hold the family’s stake in the real estate business. Along with PFC having a lien on the SPVs’ bank accounts, providing access to dividends and potential proceeds from any stake sales.

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